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Karen Ciegler Hansen, JD, Felhaber Larson Fenlon & Vogt
Holly McDonough, MA, Minnesota Medical Foundation
GOOD Individual giving has great resiliency during difficult times 59% of nonprofits experience increased giving in poor
economic times Organizations with diversified fundraising programs are in a
much stronger position to weather an economic crisis
BAD 60 of the leading US foundations reported a 28% decline in
assets in 2008 33 of the 80 largest donors in the U.S. derived their wealth
from finance and investment banking.
UGLY Economic uncertainty is one of the chief enemies of
philanthropy
Fund Raising Services – Strategic Consulting “A Current Overview of Philanthropy and the Economy” March 2009
Case StudyNancy and Ed: 65 years oldTwo Children: Betsy - 42 years old
Bob - 40 years old
Assets: Home $ 500,000IRA’s 1,000,000Stocks and bonds
500,000Lake home 400,000Life insurance 600,000
Total $3,000,000
Federal and State Exemptions from Estate Tax
Calendar Year Federal Estate Tax Exemption
MN Estate Tax Exemption
WI Estate Tax Exemption
2002 $675,000 $675,000 $675,000
2003 $1,000,000 $700,000 $675,000
2004 $1,500,000 $850,000 $675,000
2005 $1,500,000 $950,000 $675,000
2006/2007 $2,000,000 $1,000,000 $675,000
2008 $2,000,000 $1,000,000 No estate taxes
2009 $3,500,000 $1,000,000 No estate taxes
2010 No estate taxes $1,000,000 No estate taxes
2011 $1,000,000 $1,000,000 $1,000,000
The table above summarizes the current tax laws. Congress and the state legislatures continue to revisit these amounts.
If you are a non-Minnesota resident or if you own real estate in another state, that state’s exemption may also be different.
Case Study Nancy and Ed: 65 years old Two Children: Betsy- 42 years old; Divorced; 2
children, 10&12
Bob - 40 years old; Has lost job; 2 children, 3&5
Assets: Home $ 500,000
IRA’s 1,000,000
Stocks and bonds 500,000
Lake home 400,000
Life insurance 600,000 Total $3,000,000
Concerns Betsy can’t keep up with cost of living Bob may lose his home Their assets have decreased by 30% in
last year Estate Taxes
Planning Options:Depends upon their goalsHow much do they want/need to leave to their
children? To their grandchildren?How much do they want to leave to their favorite
non-profits?
Donor ClimateEstate Tax considerations are not of the
greatest concernGeneration differences in philosophiesFamily situations are changing
How That Effects Giving to Non-ProfitsCurrent GiftsFuture GiftsDonor ConcernsHow to Acknowledge and Address Concerns
Case Study Nancy and Ed: 65 years old Two Children: Betsy- 42 years old; Divorced; 2
children, 10&12
Bob - 40 years old; Has lost job; 2 children, 3&5
Assets: Home $ 500,000
IRA’s 1,000,000
Stocks and bonds 500,000
Lake home 400,000
Life insurance 600,000 Total $3,000,000
Possible Solutions If all beneficiaries are equal priority: Betsy, Bob, non-
profits If Betsy and Bob are their highest priority If grandchildren are their highest priority If want to guaranty a certain dollar amount to family:
e.g., 10% to non-profit as long as children each receive $1,000,000; or $1,000,000 to each child and then excess to charity (but charity won’t exceed 1/3 of estate) or all IRA to charity and balance to family
If want to guarantee a certain percent to charity: 1/3 to charity, funded first with IRA; or ?
CRT
Non-Profit Organization Response and Impact Upon Professional Advisors and
Donors Back to Basics Be Confident Consider More Planned Gifts Be Open to Possibilities Be Creative Be Realistic Collaborate Communication Is Critical Proactive With Own Budget and Programs Messages Communicated to Donors and Professional
Advisors Future of Fundraising and Communication
1. Keep your donors close2. Provide quality stewardship3. Make a compelling case4. Communicate consistently and
persistently5. Ask!
Be honest and transparentBe flexible Engage them without their wallets
Enhanced acknowledgementEnhanced engagement
Why this cause?Why your organization?Who benefits?
Ongoing impactMultiple optionsTarget your efforts
Mission remains criticalOpportunities for givingFocus your effortsDo the hard work!
Karen Ciegler Hansen, J.D.Felhaber, Larson, Fenlon & Vogt444 Cedar St., Ste. 2100St. Paul, MN [email protected]
Holly McDonough, M.A.Director of Development, Gift PlanningMinnesota Medical FoundationUniversity of Minnesota200 Oak St. SE, Ste. 300Minneapolis, MN [email protected]
